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The Easy Oil is Over: How NOCs are Reshaping to Stay Fit
in the New Normal
Tevin Vongvanich
President and CEO
PTT Exploration and Production PCL
26 March 2014
2
The information, statements, forecasts and projections contained herein reflect the
Company’s current views with respect to future events and financial performance. These
views are based on assumptions subject to various risks. No assurance is given that these
future events will occur, or that the Company’s assumptions are correct. Actual results may
differ materially from those projected.
3
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Consumption
Production
Ne
t im
po
rts
Barrels per day
Year
Source: Energy Policy and Planning Office, Ministry of Energy, Thailand
4
-
1,000
2,000
3,000
4,000
5,000
6,000
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Consumption
Production
Ne
t im
po
rts
Import LNG (2011) Import Myanmar’s Gas (2000)
‘000 scf per day
Year
Source: Energy Policy and Planning Office, Ministry of Energy, Thailand
5
PTTEP operates globally to provide reliable energy
supply and sustainable value to all stakeholders.
Leading Asian E&P company driven by technology and
green practices
MISSION
VISION
Passion to Explore For A Sustainable Future
VALUES
DNA
Source: PTTEP
-125
-25
75
175
275
375
475
-500
0
500
1000
1500
2000
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
13
International
Domestic
Net Income
International
Bongkot
IPO
Indonesia Iran
Cambodia
Oman
Algeria
Myanmar
Egypt
MTJDA
NZ Bahrain
Vietnam
Australia
Production (KBD)
Net Income (MMUSD)
Yadana Yetagun
Operating Investing
S1
Canada
Mozambique
Kenya
Natuna
Sea A
Production Production
6 Source: PTTEP
East Africa Deepwater,
LNG
Thailand Mature Field, EOR, Marginal Field
North America Oil Sand,
Shale Gas
Middle East EOR
Australia Exploration,
FLNG
South East Asia Deepwater, Exploration
7 Source: PTTEP
8
‘BIG’
Production 600 KBD in 2020
‘LONG’
10+ years Reserves Life
40+ years Resource Life
Green Practices
‘STRONG’
ROCE above Industry Average
Maintain the current credit rating
Business Sustainability Organizational Sustainability
HPO
Corporate
Governance
Care-Share-
Respect
Source: PTTEP
• CSV/CSR
• Good Corporate Citizen
• GRC
• Code of Conduct • Business Ethic
• Operational
Excellence • Technology • Organization
Capability
Clear visibility on growth strategy through international growth and opportunistic M&A Production Volume (KBOED)
~250
~400
600
Maintain Production Plateau in Domestic Projects
Growth from International Projects Start-ups and Ramp-ups
Expand Portfolio in new exploration areas and new businesses
Thailand :
- S1
- Bongkot
- Pailin
- Arthit
- MTJDA
Long-term Contributors :
- Myanmar M3
- Mozambique Offshore
Area 1
- Canada Oil Sands
M&A targets :
- Southeast Asia producing assets
- North America shale assets
with high liquid content
- Other prospects
Discovered Prospects :
- Cash / Maple
- Algeria HBR
New Frontiers:
- Mozambique and Kenya
2013 2020
Near-term Growth :
- Montara
- Vietnam 16-1
- Zawtika
- Algeria 433a & 416b
329
9 Source: PTTEP
10
‘BIG’
Production 600 KBD in 2020
‘LONG’
10+ years Reserves Life
40+ years Resource Life
Green Practices
‘STRONG’
ROCE above Industry Average
Maintain the current credit rating
Business Sustainability Organizational Sustainability
HPO
Corporate
Governance
Care-Share-
Respect
Source: PTTEP
• CSV/CSR
• Good Corporate Citizen
• GRC
• Code of Conduct • Business Ethic
• Operational
Excellence • Technology • Organization
Capability
0
200
400
600
800
1,000
1,200
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
11
Phase 2
350
Phase 1
150
Phase 3
550
Sales gas volume (MMscfd)
Source: EPPO, PTTEP
Challenges • Steep fast decline in production
• Ageing facilities
• Higher investment cost
Solutions • More cost-effective
• Recovering hydrocarbons
efficiently and environmental-friendly manner
Cumulative Production > 3.66 Tcf of Natural Gas and > 106 million BBL of condensate
Wells & Facilities 73 Exp & App wells and 416 Dev wells 33 WHP + 2 Processing Complex and 1 FSO
Investment > USD 6.6 billion
Phase 4
870
Benefits
Reduce duplicated works throughout Oil &
Gas value chain ranging from development
planning, engineering, procurement,
construction, operation and maintenance
Increase bargaining power and economy of
scale of EPCI contract through big lot
bidding leading to lower investment
Optimize project resources and better
surplus material management
Improve cross asset operation and
material interchangeability
Reduce spare parts and standardize of
maintenance with single design
The awarded winner from SPE Thailand E&P Awards in 2010
12
Background
Different assets and partners
Different specifications
Different design and operating philosophy
Leading to
Separate project execution
Duplicated works & lack of synergy
Standardization
Single design (in-house)
handling all subsurface
fluid properties and
conditions
Single specification (103
PTTEP specification have
been developed)
Single project
management
Source: PTTEP
13 Source: PTTEP
PTTEP own
100%
and become
operator
Challenges
• Mature field
• Waxy Crude
• Stakeholders management
Solutions
• Improve Oil Recovery & Unlock Potential
• Integrated Development & Exploration Strategy
• Value Assurance
• SSHE Excellence
• CSR/CSV
Double production
to highest record
(37,890 BBLD
on 25 Feb’13)
Cumulative Production > 218 million barrels of crude oil Wells & Facilities • 504 wells • 63 well locations
Design Principal
Lower gaslift injection point below production packer
Decrease hydrostatic pressure of liquid in both
tubing and wellbore
Improve lifting efficiency compared to conventional
gaslift method
Improve well outflow performance to increase oil
production
Benefits
Increase oil production from the lower zones
Simple completion design, utilization of available
equipment in the market
Serviceable and interventionable with standard
equipment
A
B
A – Conventional
Oil Gain
Pre
ss
ure
(p
sig
)
B – DeepLift
Production Rate (STB/day)
Inflow Performance VS Outflow Performance Curves
The awarded winner from SPE Thailand E&P Awards in 2012
14 Source: PTTEP
15
Sao Thian- A: The First CDM Project of oil & gas business in Thailand
Field Location: Sao Thian Oil Field, S1 Concession
Recovery of associated gas : 0.85 MMscfd
GHG Emission Reduction: 26,000 tCO2e/year
Flare stack (normal operation)
Flare stack (in case of emergency)
Gas metering Generator (Ratchburi Energy)
Transmission Line (PEA)
Storage tank
Crude Evacuation Crude Terminal
Separator
Producing well
Electricity Generating from excess gas At Sao Thian Oil Field, S1 Concession
Source: PTTEP